Iran — Bitcoin as a Weapon of Survival: Sanctions, Energy, and Underground Mining | SforNews

18 Aug, 2026
| Salome K

IRAN — BITCOIN AS A WEAPON OF SURVIVAL: SANCTIONS, ENERGY, AND UNDERGROUND MINING

A Diagnosis of the Old Model and Its Place in the New Energy-Digital System

DISCLAIMER

This material represents an analytical study prepared by the editorial board of the journals “Kafedra” and SforNews as part of a series of works on the transformation of the global energy and financial architecture. The material is based on open data, official documents, public statements, and analytical materials from independent experts.

This material is not legal advice, investment recommendation, or a call to action. The authors do not provide advice on the purchase, sale, or storage of any assets, including cryptocurrencies. All conclusions are probabilistic and analytical in nature. The editorial board is not responsible for any financial or legal decisions made based on the content read.

ABOUT THE SERIES

This material continues a series of articles devoted to analysing the readiness of various countries and regions for the transition to a new energy-digital system. The series serves as an evidence base for the Memorandum “Architecture of the New Energy-Digital System” and is intended to clearly demonstrate:

1. That old models of energy and financial management do not work in any country in the world.

2. That the new system inevitably revolves around energy as a core asset.

3. That bitcoin is becoming the only tool for monetising energy when physical export channels are closed.

Each article in the series presents an architectural diagnosis of a specific country or region in terms of its readiness for the global transition.

Previous article in the series: “UAE — Architect of the New System: Oil, Digital Dirham, and Mining Regulation.”

INTRODUCTION: A BRIEF DIAGNOSIS

Iran is the most contradictory point on the map of the new energy-digital system. This is a country that simultaneously is:

• An energy giant — Iran holds the world’s second-largest natural gas reserves and the fourth-largest oil reserves [1].

• A pariah under sanctions — decades of economic blockade have cut Iran off from the global financial system, SWIFT, and international banking channels [2][3].

• A pioneer of crypto mining — Iran legalised industrial mining in 2019, turning bitcoin into a survival tool [16][17][18][19].

• A battlefield — US and Israeli strikes in 2026 crashed the country’s hash rate by 77%, but failed to destroy the crypto ecosystem [10][12][13].

Iran’s paradox: a country whose economy has been destroyed by sanctions found in bitcoin a way to monetise energy that cannot be sold through pipelines and tankers. Surplus gas → cheap electricity → bitcoin → sanctions evasion — this is Iran’s “bitcoin survival chain.”

Iran is not building a new system for ideological reasons. It is building it because the old system no longer exists for it.

SECTION 1. THE OLD MODEL: WHAT EXISTED, WHAT BROKE

The Iranian economic model of the last 40 years was built on three pillars:

1. Oil and gas — the basis of export revenues, 50–60% of the budget.

2. Transit and trade — access to global markets through the Strait of Hormuz.

3. State control — centralised management of the economy.

This model has been destroyed by sanctions [2][3].

SWIFT is disconnected. Iran has been cut off from the global interbank system since 2012 (with interruptions). No international settlements through traditional banking channels are possible [2].

Oil revenues are blocked. Tankers are under sanctions, insurance is unavailable, payments in dollars are impossible. Iran sells oil at huge discounts through shadow channels — but a significant portion of the revenue ends up with intermediaries [8][9].

Inflation and devaluation. The Iranian rial has depreciated by more than 90% since 2018. Inflation has remained above 40% for decades. Citizens are fleeing the national currency into any available assets [7].

Industry in ruins. Decades of sanctions have destroyed the industrial base that could have consumed energy [3].

The map (oil revenues, exports, stable currency) has ceased to reflect the territory (sanctions, inflation, isolation). Iran found itself in an energy paradox: energy exists, but there is no one to sell it to — and no way to do so.

SECTION 2. ENERGY PROFILE: WHAT EXISTS, WHAT IS MISSING

Iran is one of the world’s most energy-rich countries, but one of the poorest in monetising it [1].

What exists	What is missing
World’s second-largest natural gas reserves [1]	Export capacity for gas (LNG terminals destroyed by sanctions) [3]
World’s fourth-largest oil reserves	Access to global payment systems (SWIFT disconnected) [2]
Huge electricity surplus (gas that has nowhere to go) [4]	Stable domestic economy (inflation >40%) [7]
Subsidised electricity — $0.002/kWh for statelinked entities [1]	Investment in grid modernisation (power system overloaded) [4]
700,000 mining devices (estimated at the start of 2026) [10][13]	Legal status for most miners (~95% are illegal) [4]

Key fact: Iran has the world’s second-largest natural gas reserves [1]. But decades of sanctions have destroyed the industrial base that could have consumed this gas [3]. The electricity produced from this gas simply had nowhere to go. Bitcoin mining became the only way to monetise this resource [6][8][9].

The chain is simple: surplus gas → cheap electricity ($0.002/kWh for regimelinked entities) [1] → bitcoin mining → bitcoin on the global market → sanctions evasion [8][9].

Conclusion: Iran cannot export energy physically — pipelines are blocked, tankers are under sanctions [3]. But it can export it digitally — through bitcoin [6][8][9].

SECTION 3. POSITION ON MINING AND CRYPTOCURRENCIES

Here lies Iran’s main paradox and its main strength.

Legalisation and regulation:

Iran legalised industrial cryptocurrency mining in 2019 [16][17][18][19]. This was not an ideological gesture but an economic necessity. Mining was recognised as an industrial activity with licensing through the Ministry of Industry, Mines and Trade [19].

However, the use of cryptocurrencies as a means of domestic payment is prohibited. In March 2026, the Central Bank of Iran officially banned the trading of all cryptocurrencies through the country’s banking system [30][31]. Cryptocurrency is permitted for mining and export — but not for domestic settlements [31].

In August 2026, the Central Bank of Iran approved the “Regulation on the Establishment, Operation and Supervision of Cryptocurrency Brokers” — 58 articles and 28 notes, coming into force in three months [11]. This is the first step towards creating a legal crypto infrastructure in the country.

IRGC and the mining monopoly:

Real power in Iranian mining belongs to the Islamic Revolutionary Guard Corps (IRGC) [1][26][27][28]. IRGClinked addresses received over $3 billion in cryptocurrency in 2025 [1][28]. The IRGC now accounts for half of all onchain activity in Iran [28][29].

How it works [1]:

• The IRGC controls access to subsidised electricity ($0.002/kWh).

• The IRGC builds its own power plants and transmission lines for mining farms.

• The IRGC converts energy into “nonsanctionable money.”

• Freshly mined bitcoin has no transaction history — it cannot be traced or blocked.

This is state military financial infrastructure, not civilian speculation [1][28].

Illegal mining and the energy crisis:

Licensed miners are just the tip of the iceberg. Estimates suggest about 95% of mining in Iran is illegal [4].

Illegal miners connect to civilian grids, overloading them. Underground farms consume about 2,000 MW of electricity — equivalent to the full capacity of a nuclear power plant [4]. Mining accounts for approximately 20% of the country’s energy deficit [4].

The situation borders on the absurd: mining equipment has appeared in schools, mosques, and private homes [4]. Authorities try to fight it, but enforcement remains extremely challenging. In 2021, authorities confiscated 45,000 miners across the country [4].

Iran’s crypto ecosystem:

• About 14–18 million Iranians (one in six) use bitcoin [26].

• Annual transaction volume grew by 11.8% and accounts for 2.2% of Iran’s GDP [26].

• The country’s crypto ecosystem was valued at $7.78 billion in 2025 [26][27][28][29].

• The largest exchange, Nobitex, has 11 million users [20][21][22][23][24][25].

SECTION 4. MINING ECONOMICS: COST AND PROFITABILITY

Iran has the lowest bitcoin mining cost in the world [1][6].

Metric	Value
Cost of 1 BTC	$1,000–1,500 [1]
Theoretical cost (subsidised energy)	$1,320 [1]
BTC price (August 2026)	~$62,000–65,000
Margin per 1 BTC	$60,000–63,000
Active miners	427,000 devices (postdecline) [10][13]

Experts call this “oil laundering on the blockchain” [1]. Iran is turning unsellable energy resources into a liquid global asset with a margin of over 50x.

The Central Bank of Iran is also active in the crypto market: in 2025, it purchased over $500 million in USDT to bypass sanctions [45][46][47]. USDT is attractive because it provides dollar stability without the need for a US bank account.

SECTION 5. WAR AND HASH RATE: US AND ISRAELI STRIKES

2026 became a turning point for Iranian mining.

February 2026: US and Israeli strikes on Iran. The result [10][12][13][14][15]:

• Iran’s hash rate fell by 77% in one quarter — from 9 EH/s to 2 EH/s.

• The loss amounted to 7 EH/s of computing power.

• 427,000 mining devices remained active, but many were disconnected.

Market reaction [5][11]:

• Transaction volumes on Nobitex increased by 873% on an hourly basis.

• Over 48 hours (28 February – 2 March), $10.3 million in cryptocurrency was withdrawn from the exchange.

• Within minutes of the first strikes, outgoing volumes increased by 700%.

Scenarios: analysts discussed that a complete shutdown of Iran’s power grid could have zeroed out 2–5% of global hash rate [5][11]. However, even a 77% drop had no noticeable impact on the global network [12][13][14][15].

June 2026: a hack on Nobitex. An Israellinked group stole $90 million [38][39]. The platform with 11 million users continued operating. The ecosystem absorbed the blow.

SECTION 6. POSITION OF THE CENTRAL BANK OF IRAN

The Central Bank of Iran is one of the most contradictory regulators in the world.

Tools:

• Ban on using cryptocurrencies for domestic payments [30][31].

• Ban on trading cryptocurrencies through the banking system (March 2026) [30].

• Purchase of USDT for state needs — over $500 million in 2025 [45][46][47].

• Development of regulations for cryptocurrency brokers (August 2026) [11].

The Central Bank’s paradox: it bans citizens from trading cryptocurrencies, but itself buys USDT to bypass sanctions [45][46][47]. It does not recognise crypto exchanges as legal, but Nobitex with 11 million users continues to operate [20][21][22][23][24][25]. It fights illegal mining, but the IRGC is the country’s largest miner [1][28].

Iran’s Economy Minister stated that the government intends to regulate the cryptocurrency channel, not restrict it [32]. This is an acknowledgment of reality: cryptocurrency has become an integral part of Iran’s economy.

SECTION 7. GEOPOLITICAL CONTEXT: THE STRAIT OF HORMUZ AND BITCOIN

The Strait of Hormuz is a key point of global energy security. 20% of the world’s oil passes through it.

In 2026, Iran began imposing a $1 per barrel toll on oil tankers passing through the strait, demanding payment in cryptocurrency [40][41][42][43][44]. This is the first time in history that a sovereign state has introduced a cryptocurrency transit fee for a strategic resource [44].

What this means:

• Cryptocurrency becomes an instrument of state sovereignty [44].

• Iran is setting a precedent: access to global energy routes requires digital payments.

• Bitcoin is transforming from a “speculative asset” into an instrument of geopolitical pressure [36][37].

In response, President Trump threatened to attack Iran’s power plants, starting with the “largest” [5]. A strike on the power grid is a strike on Iranian mining and, consequently, on the regime’s source of foreign currency.

SECTION 8. SANCTIONS AND FREEZES

The US actively pursues Iran’s crypto infrastructure.

June 2026: OFAC imposed sanctions against four Iranian crypto exchanges, including Nobitex[48][49].

July 2026: OFAC added Central Bank of Iran wallets to the sanctions list, and Tether froze $131 million in USDT [50].

Result: Iranian exchanges are forced to operate outside the official banking system but continue to function. The ecosystem adapts faster than OFAC can introduce new restrictions.

SECTION 9. ARCHITECTURAL CONCLUSION: WHAT PATH IS AVAILABLE TO IRAN

Iran is the only country that simultaneously:

1. Has huge energy resources (2nd in gas) [1].

2. Is completely cut off from the global financial system (sanctions, SWIFT) [2][3].

3. Legalised mining as an industry (since 2019) [16][17][18][19].

4. Created a $7.78 billion crypto ecosystem [26][27][28][29].

5. Uses bitcoin as a state survival tool (IRGC, USDT, strait tolls) [1][28][44][45][46][47].

Unlike Europe, Iran has not shut down nuclear power and has not abandoned hydrocarbons. It has no ideological barriers — only survival.

Unlike China, Iran is not building a state digital currency as a weapon. It uses bitcoin as a weapon — because it has no other tools.

Unlike the US, Iran is not accumulating bitcoin as a strategic reserve. It mines and sells — because that is the only way to obtain hard currency.

Unlike the UAE, Iran is not building a new system consciously. It is building it because the old system no longer exists for it.

Iran’s weaknesses:

1. Power grid under threat. Strikes on power plants could crash hash rate to zero [5][10].

2. Dependence on Chinese equipment. Like everyone, Iran depends on ASICs from China.

3. Illegal mining. 95% of mining is outside state control [4]. This creates energy deficits and social tension.

4. Sanctions pressure. OFAC freezes wallets (e.g., $344 million in 2026) [50].

5. Internet shutdowns. After strikes, connectivity was cut by 99% [5][11]. Bitcoin is uselesswithout the internet.

Main conclusion:

Iran will not “import” bitcoin like Europe. Iran will mine and sell. Bitcoin for Iran is not an “energy coupon” (as for Russia) nor a “tactical tool” (as for China). It is a survival tool — the only available channel for monetising energy under total economic blockade.

Iran shows that bitcoin becomes a necessity when old systems stop working. This is not ideology. It is physics: energy exists, money is needed, pipelines are blocked — only the digital channel remains.

CONCLUSION: HOW IRAN FITS INTO THE GLOBAL TRANSITION

Iran is not the architect of the new system nor its beneficiary. Iran is an experiment.

Europe will become an eternal importer of bitcoin — because it has no energy.

China is building parallel infrastructure — because it has a strategy.

The US are trying to maintain dominance through a bitcoin reserve — because the dollar no longer works.

The UAE are building everything at once — because they have resources and pragmatism.

Russia could become an energy sovereign — but it has no strategy.

Iran is building a bitcoin economy, because it has no other choice. Sanctions, war, isolation — all of this has turned bitcoin from “digital gold” into a tool of physical survival.

Global meaning: Iran shows that bitcoin is not just an asset. It is an infrastructure layer that allows countries with surplus energy but without access to the global financial system to monetise their resources. Sanctions cannot stop bitcoin. War can temporarily crash hash rate. But as long as there is energy and the internet — bitcoin will work.

The question is not whether Iran will use bitcoin. The question is how many countries will follow its example when their own old systems stop working.

REFERENCES

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[47] The Block — Iran acquired over $500 million in USDT, likely to support local currency and settle trade: Elliptic (21 January 2026) — https://www.theblock.co

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[49] TRM Labs — Three Enforcement Layers in Five Months: OFAC Designates Iran’s Domestic Crypto Exchanges (3 June 2026) — https://www.trmlabs.com

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